Fred Reichheld is creator of the Net Promoter System, and the founder of Bain & Company’s loyalty practice. He is the author of five books, including the New York Times bestseller, The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World. Fred is currently a fellow and senior advisory partner at Bain & Company, and his work on customer loyalty has been widely covered in the Wall Street Journal, New York Times, Financial Times, Fortune, and other media outlets. His most recent book, Winning on Purpose: The Unbeatable Strategy of Loving Customers, shows that enriching the lives of customers through love and care is the primary purpose of business. It is also the best way to ensure sustainable growth, happily fulfilled employees and robust investor returns. He is Marcel Schwantes’s guest this week on Love In Action.
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- “Financials is what we guide our lives and measure our success by, pay bonuses on, and communicate to investors through, but it doesn’t tell us when we’ve done meaningful work that’s enriched the lives of our customers,” Fred shares. “It doesn’t give us a balance sheet of all the lives we’ve enriched or diminished.” [6:39]
- According to a survey conducted by Bain, only 10% of senior executives surveyed said their business’ primary purpose was their customers. “I’m stunned; the evidence is so clear that unless leaders inspire their teams to enrich the lives of customers, they’re not going to [make things better],” Fred says. [10:19]
- Marcel asks Fred to define loving your customers. “I think love [is when] your happiness is primarily driven by the happiness you can create in your partner,” he responds. “‘Love thy neighbor as you love yourself’ [means] your happiness comes out of your ability to make your neighbor happy… The Jesus idea of love is pretty close to the business idea of love: the more we can care for others and make their lives better, the happier we are. In a well-run business, the wealthier we get.” [14:34]
- When employees feel loved and cared for, they translate that into their performance, which leads to happy and satisfied customers, Marcel comments. Fred talks about how and why leaders should help their employees earn happiness through the reactions of their customers. [18:27]
- “The leader’s primary job is to create a culture where the golden rule is dominant, and where people understand that winning is only going to happen for anyone when teams treat customers right and earn their loyalty,” Fred remarks. “Additionally, the teams are empowered to speak up when they see something going on that doesn’t feel like it’s consistent with their values.” [21:16]
- Marcel and Fred explore why ‘bad profits’ are so prevalent. “It’s because [leaders] are indicating that the reason we exist is to make shareholders rich; profits is our purpose,” Fred explains. “Or if they understand that customers are their purpose, they don’t have the courage to speak up and say these things are toxic.” [23:14]
- “Net promoter is a tool to make teams happier,” Fred says. “It’s a framework to think about living by the Golden Rule and choosing which people you want to have relationships with… if you choose your loyalties wisely, they shape your life and they define your legacy.” [30:47]
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